Running short of cash and the need is immediate? Dan’t worry, there is always a personal loan in the offing.
Personal loans are, of late, not too difficult to access if you have a relatively stable source of income. In fact lot of banks & NBFCs have made a good business out of selling personal loans & getting EMIs.
Here are some typical reasons why people take personal loans:
- Managing day to day expenses – Well, I run out of money by month end, so …
- Paying off credit card debt – Repaying debt at at 12 percent per annum is lesser evil than repaying debt at 36 percent per annum! (You may also like to read – story behind credit card debt and personal loans.)
- Buying a house – While there is home loan, it may not be enough to fund your dream home.
- Renovating a house – Home needs repairs (may be urgent, may not be urgent) but I am short on savings.
- Vacation – An expensive, exotic, exquisite European vacation which you always deserved!
- Down payment before starting an EMI – No 100% funding fore home/ car, so bridging that with help of personal loans.
- Medical Emergency – It may come without announcing and you may be uninsured or under insured.
- Wedding – A fat grand wedding which everyone will remember for times to come …
- Education – Usually for child (usually in an expensive college), occasional for self/ other family members. But what is the ROI?
- Unforeseen circumstances – Unforeseen circumstances are, well … unforeseen.
And, a good chunk of people opting for personal loans fall into one or more of these categories:
- They have sudden need for money but not have enough savings
- They have enough savings but choose not to use them (Virtual Debt)
- You don’t need money urgently, but if you have money you can enjoy life! (buy a gadget, go on vacation etc!)
Do you fit in any of these categories?
Whether personal loans are good or bad, or whether do I suggest anyone to take it – No prizes for guessing my answer!